Beyond the ASX: The Case for Going Global

A Logical Next Question for Australian Investors

If Australian investors are beginning to think beyond property, the next strategic question may be whether they should also begin thinking beyond the ASX.

For decades, domestic equities have played a role similar to residential property within Australian portfolios: familiar, accessible and historically rewarding. The combination of strong dividend culture, franking credits and the long-term success of many Australian companies created a natural preference for investing close to home.

That preference remains understandable. The ASX continues to host high-quality businesses across banking, resources, healthcare and infrastructure, and Australian equities will likely remain central to many domestic portfolios for years to come.

However, the case for meaningful global exposure has strengthened materially over the past decade. The opportunity set available to investors today is far broader than it once was, while many of the industries driving global economic growth increasingly sit outside Australia altogether.

This is not an argument against the ASX. Rather, it is an argument for completing the portfolio around it. The key question for investors is no longer whether Australian equities remain valuable, but whether domestic markets alone provide sufficient exposure to the industries, technologies and structural trends shaping the next decade.

The Persistence of Home Bias

Despite the long-term case for global diversification, most Australian investors remain heavily weighted towards domestic equities. Many self-managed super funds and high-net-worth portfolios continue to allocate between 60% and 80% of equity exposure to Australia, despite the Australian share market representing only a small fraction of global market capitalisation.

This pattern, commonly referred to as “home bias”, is well documented across developed economies but is particularly pronounced in Australia. Several factors contribute to it. Franking credits provide a meaningful tax advantage for domestic dividend income, familiarity with local companies creates comfort, and currency exposure can make offshore investing appear more complex or uncertain.

These are reasonable considerations rather than irrational behaviours. Franking credits remain valuable, particularly for income-focused investors, and currency volatility does add another layer of risk management to global investing.

However, the cost of significant home bias has grown over time as global markets, particularly the United States, have increasingly outperformed the ASX. Structural growth themes such as artificial intelligence, cloud computing, semiconductors and digital infrastructure have become heavily concentrated offshore, while Australia’s domestic market composition has remained relatively narrow.

For many investors, the real opportunity may not lie in replacing the ASX, but in recognising that the global investment universe is significantly larger than the domestic market alone.

The ASX Is a Strong Market, But It Is a Narrow One

The ASX remains a strong market with globally competitive companies, deep liquidity and a well-established dividend culture. It has delivered attractive long-term returns for Australian investors and continues to play an important role within diversified portfolios.

At the same time, the structure of the Australian market creates meaningful limitations.

The ASX 200 remains heavily concentrated in financials and resources, with banks, mining and energy companies accounting for a substantial share of the index. That concentration has served Australia well during commodity upcycles and periods of stable domestic economic growth, but it also creates large gaps elsewhere.

Several of the world’s most economically important sectors remain materially underrepresented on the ASX, including:

• artificial intelligence infrastructure
• semiconductors and advanced hardware
• cloud computing and enterprise software
• cybersecurity
• global consumer technology platforms
• advanced healthcare and biotechnology
• aerospace, defence and advanced manufacturing

This means many of the structural growth themes reshaping the global economy are difficult to access through domestic listings alone. Even Australia’s strongest companies in adjacent sectors operate at a fundamentally different scale to their international counterparts.

The implication is not that the ASX has failed. Rather, it was never designed to capture every major global investment theme. For investors seeking exposure to the industries likely to shape the next decade, that exposure increasingly needs to come from outside Australia.

Many of the World’s Most Influential Businesses Aren’t Listed in Australia

Over the past decade, global equity markets, particularly the United States, have materially outperformed the ASX 200. Since 2014, the S&P 500 has delivered total returns of more than 250% in AUD terms, significantly ahead of the ASX 200 even after accounting for dividends and franking credits. Much of that divergence has been driven by sectors that remain structurally underrepresented in Australia.

Today, the seven largest companies in the United States alone account for more market value than the entire ASX. Microsoft, Apple and Nvidia each individually exceed the total market capitalisation of Australia’s largest listed companies. Nvidia alone recently surpassed USD3 trillion in market value, while the ASX remains heavily concentrated in banks, miners and energy producers.

The composition gap matters. Financials and resources account for roughly half of the ASX 200 by weight, whereas sectors such as semiconductors, cloud computing, enterprise software, digital advertising and advanced artificial intelligence infrastructure dominate major US indices. Companies linked to AI infrastructure and semiconductors have become some of the largest contributors to global equity market performance in recent years, yet Australia has minimal direct exposure to these industries through domestic listings.

The rapid expansion of artificial intelligence, cloud computing and digital infrastructure has only reinforced the divergence. Global hyperscalers including Microsoft, Amazon, Alphabet and Meta are collectively spending hundreds of billions of dollars annually on AI infrastructure and data centres, creating investment ecosystems that extend well beyond traditional technology companies into semiconductors, cybersecurity, networking and power infrastructure.

While the ASX continues to offer high-quality businesses and attractive dividend income, its structural composition limits exposure to many of the industries driving global earnings growth. Long-term market leadership often follows innovation leadership, and many of today’s most influential innovation platforms sit outside Australia altogether.

Past performance does not guarantee future returns, and Australian equities have outperformed global markets during earlier commodity-led cycles. However, the industries shaping the next decade of economic growth increasingly sit beyond domestic markets, making international exposure more relevant within long-term portfolio construction.

The Practical Path to Global Exposure

A decade ago, global investing for Australian retail investors was often expensive, administratively complex and relatively inaccessible. Accessing offshore markets typically involved specialist brokers, manual foreign exchange conversions and tax reporting processes that did not align comfortably with Australian tax requirements. For many households and SMSFs, the friction simply outweighed the perceived benefits.

That environment has changed materially. ASX-listed international ETFs now provide cost-effective exposure to major global indices including the S&P 500, NASDAQ, MSCI World and emerging markets, alongside a growing range of thematic strategies covering sectors such as artificial intelligence, semiconductors, cybersecurity and infrastructure. Direct international share trading is also now widely available through major Australian brokerage platforms, many of which offer integrated foreign exchange services, simplified administration and reporting tools designed specifically for Australian tax filing.

The practical barriers that historically discouraged global investing have steadily declined. Withholding tax on US dividends can generally be reduced from 30% to 15% through W-8BEN documentation, a process that has become largely administrative across modern investment platforms. Currency-hedged ETF structures also allow investors to gain exposure to international equity markets while managing AUD/USD volatility more actively within portfolio construction. Tax reporting has become significantly more straightforward as most ETF issuers now provide Australian-style annual tax statements compatible with domestic tax lodgement requirements.

Accessing international markets is no more operationally difficult than purchasing shares on the ASX. Geography is becoming progressively less of a constraint on portfolio construction, particularly as younger investors become increasingly comfortable building diversified portfolios across multiple markets and asset classes.

What a More Global Australian Portfolio May Look Like

Going global does not mean abandoning Australian equities. Domestic markets still provide attractive income exposure, strong banking franchises, world-class resource companies and high-quality infrastructure businesses.

Instead, global investing increasingly complements the ASX by broadening sector exposure and reducing concentration risk.

Modern diversified portfolios may increasingly combine:

• Australian equities for domestic income exposure
• Global equities for structural growth exposure
• International and domestic ETFs for diversification
• Fixed income and infrastructure for defensive positioning
• Alternative assets for additional diversification and risk management

This approach reflects how institutional investors have long constructed portfolios. Large superannuation funds, sovereign wealth funds and family offices rarely concentrate heavily in a single geography or sector. Instead, they allocate capital globally in recognition that economic leadership, innovation and earnings growth are increasingly distributed across multiple regions and industries.

The discussion is no longer simply about choosing between Australian and international shares. It is increasingly about constructing portfolios capable of capturing global opportunity while remaining resilient across different economic cycles.

The Future of Australian Investing May Be Increasingly Global

The ASX will continue to play a central role in Australian investing. It remains home to many high-quality companies and continues to offer attractive income characteristics that are difficult to replicate globally.

At the same time, the global investment universe is substantially larger, more diversified and increasingly shaped by industries that sit outside Australia altogether.

Artificial intelligence, digital infrastructure, advanced healthcare, semiconductors, robotics and cloud computing are becoming central drivers of long-term economic growth. Australian investors seeking meaningful exposure to these themes will increasingly need to look beyond domestic markets.

That shift may already be underway. Younger investors are generally more globally oriented, international investing has become significantly more accessible, and portfolio construction is gradually evolving away from domestic concentration towards broader diversification.

The next phase of Australian investing may not be about abandoning the ASX. It may simply be about recognising that long-term opportunity increasingly extends far beyond it.

Considering Global Exposure Within Your Portfolio?



Every portfolio is different, and the appropriate level of international exposure depends on factors such as existing holdings, investment objectives, tax position, time horizon and risk tolerance. For those reassessing portfolio concentration, sector exposure or diversification opportunities, speak with a Sharewise adviser today to explore how global investments may complement your existing domestic holdings within a balanced long-term strategy.